Dissident shareholders trying to take control of Storer Communications Inc., the Miami-based media company, said yesterday that an order issued by a Connecticut court Friday will not prevent them from seeking to elect their own representatives to Storer's board of directors.
Storer's attorneys disagreed, saying the judge's findings made it clear that the dissidents could not continue to solicit proxies and campaign for their own slate of directors without getting approval of the Connecticut Department of Public Utility Control.
Both sides are beating the bushes for shareholder support at the May 7 annual meeting in Miami, with the company and the dissidents each trying to elect at least five of the nine members of the board.
The dissidents have said that if they gain control, they would maximize the return to the shareholders by liquidating the company. Storer owns seven TV stations and has 1.5 million cable customers in 18 states. Storer's franchise in northern Prince George's County is expected to be sold next month to a group of investors headed by former Prince George's County executive Winfield M. Kelly Jr.
With the battle for the assets of Storer Communications growing increasingly litigious, the company sought help in state court in Connecticut, which has one of the tougher laws affecting corporate acquisitions. After a hearing, Judge Ronald J. Fracasse issued a temporary injunction ordering the dissidents -- Coniston Partners and associates -- to apply by May 1 for state approval of the takeover effort. It also ordered them not to sell or dispose of any parts of the company until that approval was granted.
Augustus K. Oliver, a general partner in Coniston Partners, said of the decision: "It in no way affects our ability to solicit proxies and elect nominees to the board of the parent company."
Oliver said that there was no reason to appeal the judge's decision. The company, he said, had been trying to prevent them from pursuing the takeover battle but had failed. He said that Coniston Partners would file the application by May 1, as the judge requested.
Attorney William R. Murphy of New Haven, representing Storer, took an opposite view of the judge's order. He said the judge made it clear in his findings, accompanying his order, that the soliciting of proxies constituted an action to take over the company and that that action was prohibited without prior approval from the state agency. "That is the only fair interpretation," Murphy said.
The case dealt specifically with Storer Cable TV of Connecticut Inc.; Storer Communications of Groton Inc., and Storer Communications of Clinton Inc, which serve 95,000 cable customers. Other litigation involving the Storer battle is pending in federal courts in New York and Connecticut.
The outcome of the struggle for shareholder votes apparently is closely tied to the votes of the institutions that hold upwards of 60 percent of the company's stock. If the company wins, they have agreed in principle to a deal with Kohlberg Kravis Roberts & Co., a New York firm specializing in management buyouts. A revamped management would pay stockholders $75 in cash, $25 in preferred stock (without dividends for six years) and warrants -- whose value was not immediately stated. But the deal is contingent on regaining control of the board.